ECONOMY

Germany voices caution on Greek bailout deal

germany-voices-caution-on-greek-bailout-deal

The German government sounded a note of caution on Tuesday about a third bailout for Greece, saying the new program must address the debt-stricken country's "business model" for the next three years.

"We're talking about a program for three years, it needs to be negotiated thoroughly," Deputy Finance Minister Jens Spahn told Germany's ARD television shortly before Greece and its international lenders said they had concluded a new bailout package.

"It must be convincing that it's not just about Aug. 20," Spahn added.

Just after Spahn spoke, Greece and its international lenders clinched a multi-billion-euro bailout agreement, officials said, raising hopes aid can be disbursed in time for a major debt repayment falling due in days.

But Germany has repeatedly stressed its desire for "quality before speed" in the negotiations.

"It's not just about making savings, that it works for the budget, but above all about how Greece … earns money in the next few years, what is the 'business model' so to speak," Spahn said.

Last month, German lawmakers gave their go ahead for the euro zone to negotiate a third bailout for Greece, but almost a fifth of Angela Merkel's conservatives voted "no" in a blow to the chancellor.

Conservative lawmaker Klaus-Peter Willsch said he could not imagine fewer of his peers voting against a new bailout even though the conservatives' parliamentary leader has said "no" voters could not remain in committees on which a majority is needed.

"I can't imagine that … I don't think the probability has reduced that it will be more next time," Willsch told Deutschlandfunk.

[Reuters]